IOB surpasses PNB, BoB to become the second most-valued listed PSB

In the past one month, the stock price of IOB has zoomed 57 per cent as compared a 4 per cent decline recorded by PNB and a 5 per cent gain in BOB share price

Indian Overseas Bank (IOB), on Friday, became the second most-valued listed public sector bank with a market-capitalisation of over Rs 50,000 crore.

As Street discounts privatisation of the state-owned lender, its shares have appreciated over 50 per cent on the BSE in the past one month. Effectively, the bank's m-cap has crossed Rs 50,000 crore-mark, surpassing its peers Punjab National Bank (PNB) and Bank of Baroda (BOB) in m-cap ranking. 

At 3:04 PM, IOB stood with an m-cap of Rs 51,887 crore, pushing PNB (Rs 46,411 crore) and BOB (Rs 44,112 crore) to third and fourth position, respectively, as per data available on BSE.

In the past one month, the market price of IOB has zoomed 57 per cent, as compared to a 4 per cent decline in PNB and 5 per cent gain in BOB share price. In comparison, the S&P BSE Sensex was up 1 per cent during the same period.

The stock of IOB had hit an over four-year high of Rs 29 on June 30, 2021, its highest level since May 2017, following reports that IOB and Central Bank of India might be privatised in the first phase of PSB privatisation drive. According to media reports, the two lenders might see 51 percent sale in the first phase of disinvestment, the report said.

The privatisation plan was announced in the Union budget for 2021-22 as a part of the government’s broader divestment goals for FY22. It includes privatisation of several other non-financial state-owned entities and listing of the wholly-owned Life Insurance Corporation of India.

Financially, IOB's net profit jumped over two times at Rs 350 crore in January-March quarter (Q4FY21) quarter on the back of higher non-interest income. The bank had a profit of Rs 144 crore in the same period a year-ago. Net interest income, however, declined 8.4 per cent at Rs 1,403 crore, while non-interest income jumped 93.5 per cent at Rs 2,016 crore over the previous year quarter.

The bank's asset quality showed improvement with the gross non-performing assets (NPAs) falling to 11.69 per cent of the gross advances as of March 31, 2021 from 14.78 per cent by year ago same period. Net NPAs fell to 3.58 per cent from 5.44 per cent.

The bank said its board of directors has approved the capital plan for 2021-22 under which it will issue equity shares up to a maximum extent of 125 crore shares by way of follow on public offer/rights issue. The issue may be with or without participation from the government or to qualified institutional buyers (QIBs), the lender said.